Piracy Battle Rages in Asia Pacific

Three Hollywood studios early last month won a landmark lawsuit against video pirates in China, the top country on the world's list of movie piracy offenders.

A Shanghai court awarded Walt Disney Co., Vivendi Universal and 20th Century Fox $20,000 in damages, and is requiring two Shanghai companies -- Shanghai Hezhong Enterprise Development Co. and Shanghai Yatu Film Culture Broadcasting -- to issue a public apology in the Chinese press, according to The China Daily.

The studios took the two companies to court last September after official investigations into the companies' retail outlets revealed pirated DVDs of movies, including Moulin Rouge, Jurassic Park III and The X-Files Season 4. AOL Time Warner also sued Chinese retailers and factories last year, and also won damages and apologies in a settlement reached this spring.

The Motion Picture Association (MPA) has long criticized the Chinese government and other governments in the Asia Pacific region for lax policies and enforcement of intellectual piracy theft.

China remains one of the largest offenders in the piracy battle worldwide, and it is the No. 1 country in the Asia Pacific region in losses to U.S. intellectual property copyright holders, making up $168 million of the overall $3 billion lost worldwide each year, according to the MPA.

The Asia Pacific region is the major source of most of the pirated optical media distributed throughout the world. And not only is pirated video product a major part of the economy in this region, but there are strong ties to organized crime syndicates, according to the MPA's recent report “Organized Crime and Movie Copyright Piracy Second Quarter 2003.”

“The current trend for organized pirate syndicates is forward integration of the business by expanding into and controlling optical media production facilities in countries where legislation is weak and enforcement ineffective,” the report states. “Piracy in Asia is so deeply rooted that, [of the cases in which] the MPA is involved, 91 percent of the world's optical discs were seized in this region in 2002, and it is estimated that 95 percent were replicated there.”

The report goes on to cite several specific examples of organized crime controlling movie piracy in Asia, from firebomb attacks in triad gang wars at pirate optical disc shops in Hong Kong to personal death threats against a Malaysian government official if the crackdown on illegal video compact disc (VCD) traders didn't stop.

Physical violence against enforcement officials in Malaysia has escalated to the level that this year officials from Malaysia's Ministry of Domestic Trade and Consumer Affairs began carrying firearms during investigations and enforcement raids of pirated film goods.

The MPA also suspects that Muslim-Filipino gangs are running the market for pirate discs in the Philippines, working with manufacturers from Chinese organized crime syndicates, according to the report. The organized crime syndicates use the money they earn from pirated DVDs and VCDs to fund drug smuggling and terrorist activities, the MPA report said.

“Beyond the attraction of copyright piracy being a highly lucrative and successful business for organized crime ... there is the lack of deterrent or coordinated government enforcement and inadequate criminal sentencing of those caught,” the report concluded.

The MPA report calls for new legislation to track piracy money trails and calls for copyright offenses to be designated as organized crime under money-laundering statutes.